Reply to “I’m destitute, and I need you to solve this”

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[quote=Anonymous][quote=Anonymous]This is what I have recently been told by my elderly mom. This situation has been brewing for a looong time but now I feel like I need to post not only for some insight, but also just so I can get things off my chest. Will try to stay vague on some details.

Mom is early 70s and lives alone. Dad died years ago – had nothing, no life insurance, savings, etc. Mom was getting along well enough since that time, living off social security and working. Parents always spent like crazy and lived off credit cards so no savings/investments/retirement accounts even though everyone in their lives, for decades, unsuccessfully attempted to move them in a direction of even basic financial planning.

I didn’t realize the extent of the debt until recently when mom lost her job, her only income stream outside of social security. We’re talking tens of thousands in credit card debt. Plus a mortgage (maybe taking up two thirds of the home’s value) and, of course, a car payment for a car purchased unbeknownst to us - just before the job loss. The house and car notes alone exceed what she gets in social security. Long story short, she is in the bankruptcy filing process to eliminate the credit card debt. I’m not sure if this was the best course of action but it was encouraged by another family member, who has helped with the legal fees. Mom wants to go back to work but we (the rest of the family) are unsure if a job is even realistic given her age and physical limitations. She will not consider taking in a roommate, which in my mind would solve the income problem to some extent.

I live several hours drive away, while my sibling lives closer to her. Sibling is likely not willing to step in financially so that leaves me trying to figure out what the heck to do without wrecking my own financial future, all while working and raising my own family with no help, financial or otherwise, on either side. So fun!
The past couple months I have been sending grocery store gift cards to help with food and prescription needs. Obviously, some bigger plans will need to be made. Her moving into our house is not an option for various reasons I won’t get into here. I have considered the possibility of buying a place near me for her to live and pay what she can but of course that will put financial strain on my immediate family. I’ve also begun the process of looking into what programs for which she may qualify, housing and otherwise. It’s all so overwhelming and the stress is getting to me. It sucks even worse because [b]she wasn’t a bad mother, just really bad with money [/b]and gave no thought to the future and always assumed someone else would fix things.
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You need more information before you can really move forward. Yes it’s a frustrating situation, but she was born in the 50s; many women her age never learned to manage money. They were discouraged from it and couldn’t even have a bank account in their own names without a husband’s permission until 197? So first, I’d give her some grace. It will be freeing for you as well.

Next, have a phone consultation with a landlord tenant attorney in her jurisdiction. Find out what the risks are and how they can be mitigated. There’s a mythical belief that most jurisdictions are super tenant friendly, and that’s not the case. Find out the facts and go from there.

Speak directly to the bankruptcy attorney. Each state has different rules about what can be kept in bankruptcy, so you need to understand what thus will really look like. It’s also possible that she might be better off settling for greatly reduced payments to the creditors. They’re getting zero from bankruptcy and at this point the debt has likely been sold for pennies on the dollar. If you’re going to be involved, it may be worth preserving her credit so that she can downsize her home in her own name and move potentially move closer whether now or in the future. If she pulls out of bankruptcy, there needs to be a firm agreement about future debt.

The car lease likely needs to go. They don’t want to lose the car or go through the trouble of legal action so you can probably negotiate. Creditboards.com is a great resource for figuring some of these things out.

If she wants to work, why not? At her age it’s not reducing her spousal benefit and it’s probably good for her socially.

Your mom wants you to step in. She was a good mom. You also need to care for yourself and your family. Factor that into the options you present, maybe bringing her closer is good for you, maybe it’s not. Gather the facts, and present her with some defined options. I think this may be what she wants more than anything, for you to just tell her, “Mom you have to do A, you can choose between B and C.” Sibling can get on board or get out of the way.

And to all the PP’s directing OP to a government home, please provide links.

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